The Economic Commission for Latin America and the Caribbean (ECLAC) presented its economic growth projection for the region for the remainder of 2025 and 2026, with an increase of two-tenths of a percentage point.

Among the countries that will achieve the highest economic growth are Argentina (5 %), Panama (4.2 %), Paraguay (4 %), the Dominican Republic (3.7 %), Guatemala (3.6 %), and Costa Rica (3.5 %), according to the report presented this Tuesday.

On the other hand, the nations that will experience more moderate growth, ECLAC mentions Honduras (3.2 %), Nicaragua (3.1 %), Peru (3.1 %), Uruguay (2.8 %), Colombia (2.5 %), Chile (2.4 %), El Salvador (2.4 %), Brazil (2.3 %), and Venezuela (2 %).

The countries that are lagging the most include Bolivia (1.5 %), Ecuador (1.5 %), and Mexico (0.3 %). They are joined by Cuba and Haiti, where the economy will decline, according to the organization, to -1.5 % and -2.3 %.

According to the ECLAC report, “the countries of the region face the urgent need to accelerate the mobilization of resources for development in order to avoid another lost decade, in a complex and unfavorable international context.”

In this regard, it urges the nations of Latin America and the Caribbean to implement “a transformative fiscal policy, greater private investment, and renewed international cooperation, along with strong and agile institutions.”

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The Inter-American Development Bank (IDB) released data on GDP per capita growth in Latin America and the Caribbean in the period 2014-2024, highlighting that it was almost zero.

According to the representative of the Inter-American Development Bank (IDB) Group in Peru, Tomás Lopes-Teixeira, in his presentation on October 10 for the Economic Commission for Latin America and the Caribbean (ECLAC), the region is affected by deep political polarization and lacks effective economic development policies.

However, the official mentioned a “general challenge and a historic opportunity that the region has to grow, despite its economic complexity and productive diversity.”

This challenge has to do with early investments in technology, indicating the relevance of having “entrepreneurial talent as a central axis of development, as well as informality, which represents a difficulty for SMEs to incorporate technology into their processes.”

According to Lopes-Teixeira, it is crucial to give the proper place to technological advances in the region today and to establish the technologies that will be used.

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The Economic Commission for Latin America and the Caribbean (ECLAC) considers that the increase in indebtedness levels in the Latin American region requires an urgent transformation of the international financial architecture of sovereign debt, with the objective of to offer countries different options and alternatives that allow countries an “inclusive and sustainable” development.

This is clear from the report ‘Public debt and restrictions on development in Latin America and the Caribbean’, prepared by ECLAC and which was presented this Tuesday by the organization’s executive secretary, José Manuel Salazar-Xirinachs, within the framework of the ‘ XXXV Regional Seminar on Fiscal Policy’.

This traditional meeting brings together authorities, specialists, civil society and academics every year to discuss the fiscal policy challenges faced by the countries of the region. On the second day of this Tuesday, the restrictions on growth and development that originate from public debt and their implications for fiscal space in the countries of Latin America and the Caribbean were analyzed.

In this way, according to the report, both the increase in debt levels in the region and the macroeconomic and financial conditions, which are currently “complex”, press the need to expand financing instruments for Latin America.

As Salazar explained, the increase in debt service, especially because of the higher interest paid, forces countries to allocate more and more public resources to guarantee debt sustainability.

This translates into reductions in public investment and social spending, which generates “a vicious circle” since they are necessary to promote inclusive, sustained and sustainable growth, which allows not only stabilizing the path of the debt, but also move towards the fulfillment of the Sustainable Development Goals (SDGs).

In this sense, the document calls for formulas to reduce borrowing costs, create a global financial safety net, and move towards a new institutional framework for sovereign debt restructuring.

Source: dpa

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The executive secretary of the Economic Commission for Latin America and the Caribbean (Cepal), José Manuel Salazar-Xirinachs, has urged addressing the problem of labor informality in Latin America in order to improve the region’s productivity figures, which are “very low” compared to other geographical areas.

In a podcast of the International Labor Organization (ILO), Salazar has argued that there are no “magic solutions” to increase productivity, and it is necessary to focus on “structural” measures that entail a change in labor relations in Latin America.

Among the main obstacles to closing the gaps with developed countries, the Costa Rican has pointed out that there is a “serious problem” of human capital, caused by low levels of investment in training and education.

“You cannot participate in the productive paradigms of the 21st century without a modern workforce and without the skills demanded by today’s world, in which there is a clear commitment to digital transformation and technological advances,” he warned.

Latin America requires a new approach to the labor sector

Regarding the current situation in Latin America, Salazar has insisted that the business ecosystem, in which small and medium-sized companies mainly coexist, is marked by low productivity, although more and more companies are found to be “islands” of excellence, success and competitiveness. “However, they still represent a low representation within the economy of the countries of the region as a whole,” he lamented.

Thus, the ECLAC secretary has focused on the opportunities that the irruption of technology is generating in the region and has appealed to “bet” on new market niches in the services sector such as electromobility, the circular economy or the transition energetic.

“We must approach the issue of opportunities for productive development and rethink the industrialization of the service sector, as well as improve productivity in the public sector, which is inefficient,” he concluded.

Source: dpa

(Reference image source: ECLAC, Europa Press)

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